Joe GallopUK Music has published its This Is Music 2022 annual report, which details the impact of the pandemic on the sector and its “fragile recovery”.
UK Music chief executive Jamie Njoku-Goodwin (pictured) said the report findings showed why the Government should act to support the music industry, which still faces a “major threat from strong economic headwinds”.
The This Is Music 2022 report, based on data collated from across the music industry in 2021, found that the UK music industry’s contribution to the economy in 2021 was £4 billion – up 26% on £3.1bn in 2020, but still down 31% on the pre-Covid all-time high of £5.8bn in 2019.
Employment in the music industry rose to 145,000 jobs in 2021 – up 14% on the 128,000 jobs in 2020, but still down 26% on the pre-Covid record of 197,000 in 2019.
Exports in the sector rose in 2021 to £2.5bn – up 10% on the £2.3bn in 2020, but down 15% on the £2.9bn in 2019.
UK Music’s report measures the health of the music business by collating data about the sector’s contribution in goods and services to the economy. That economic contribution is known as Gross Value Added (GVA).
Njoku-Goodwin said the report shows the urgent need for support from new PM Liz Truss and the Government to reduce the tax burden on the music industry, incentivise investment and help boost exports.
He said, “The UK music industry is working hard to recover after the catastrophic impact of Covid-19, but there is still some way to go to restore the jobs and growth lost during the pandemic.
“Our sector still faces a serious threat from the economic storm that could blow our fragile recovery off course without urgent Government support. It’s vital that Government acts to protect and support a sector that creates jobs, contributes to the economy and matters to millions of people across our country.
“The new prime minister has said she wants to cut taxes to stimulate growth. If she is serious about this, then she should use the emergency budget to reduce the tax burden on the music industry, for instance, by extending the hugely successful creative industry tax reliefs to the music industry.
“This would incentivise investment and boost exports of British music, which are at risk due to increasing international competition and issues following the UK’s exit from the European Union.
“We welcome the Government’s announcement to combat the impact of soaring energy bills, which will give music businesses some urgently needed support. However, we need clarity about what happens after that support is withdrawn after six months. And we still need to see more assistance to secure our sector’s long-term recovery, including a significant cut in VAT from its current rate of 20% – something the Government did in the pandemic to support the music sector.
“It is also essential that Government recognises the importance of copyright to the creative sector and takes step to protect intellectual property rights. Proposals by the previous Government to allow AI companies a copyright exception for text and data mining are an existential threat to our sector and must be stopped.
“These plans constitute a green light to music laundering and the whole industry is united in urging the Government to scrap them. As we showed before the pandemic, the UK music industry can be world leading. But without help from new Prime Minister Liz Truss and her ministerial team, there is the deeply worrying prospect that the billions spent supporting music businesses and cultural institutions during the lockdowns will be wasted. We cannot allow that to happen.
“We have a music industry in the UK that is the envy of the world and a talent pipeline that continues to produce global stars and an army of highly skilled professionals.
“It is vital that the Government works with us to protect and nurture the music industry from the economic turbulence we face so we can pull through and create the jobs and investment to make it even stronger than it was before the pandemic.”
UK Music has outlined a five-step plan for Government to support the music industry recovery:
- Protect and promote music made in the UK at home and abroad: Protect intellectual property, reduce red tape, establish a transitional support fund, increase export support programmes and establish an export office.
- Incentivise music activity in the UK: Create a fiscal incentive to encourage new UK music production and reform understanding of the potential for the sector.
- Support music industry in delivering for society: Establish a Government-industry working group on sustainability and appoint a Commissioner to ensure music is included in health and social care provision.
- Building UK music careers and skills: Deliver the Arts Pupil Premium to support schools’ provision of music to all children and introduce parity of support for the self-employment.
- Support music spaces throughout the UK: In face of rising inflation reduce VAT, introduce business rates cuts and new duties to protect music.